Music Industry Predictions: Labels, Concerts, Licensing and More

by Liz Moy on January 31, 2013 · Comments

This guest post is written by Jeff Rabhanartist manager, music-industry executive and international consultant. His clients have garnered twelve Grammy Awards, sold more than one hundred million records and generated over one billion dollars in global receipts. Rabhan currently serves as Chair of the Clive Davis Department of Recorded Music at New York University’s Tisch School of the Arts.

Fire up the crystal ball folks because it’s time to look and see what the future holds for many areas of the music industry and ultimately for many of you who are pursuing a career in the business. We’ve seen more change in the last decade then the previous 50 years combined, leaving many of you befuddled and wondering what tomorrow will bring.  While there’s no such thing as a sure thing in the music business, read on to see how today’s unanswered questions get answered tomorrow…

The Future of Record Labels

Can you imagine a major record company that only has a roster of 10 international superstars instead of 60 acts in various stages of development? It might not be so far-fetched.

Record companies are adept at doing three main things: getting songs on radio, effectively distributing records to countries around the world simultaneously, and marketing worldwide successful artists on a grand scale.

Not a week goes by where I don’t hear some young artist knock a major label for not developing artists. It’s not what they do anymore so why blame them? It’s like blaming a shoe store for not selling underwear.

It’s on you to build a story for yourself that makes you appealing to them if that’s your goal, and a catchy song is no longer enough to grab their attention.

What does this mean?

You will see label rosters shrinking down to their core. Look for labels to “specialize” in certain genres or styles of music. Imagine a Sony Music that only releases female pop records like Beyonce, Adele, and Shakira. Or an Interscope that becomes a hip-hop only label.

One thing is for sure: if it isn’t fit for radio, chances are you will not find it on a major label roster in the next five years. Which creates an opportunity for… independent labels.

Independent labels grabbed 32.6% of U.S. album sales in 2012, according to Soundscan stats.

Indie labels are experiencing a resurgence of visibility within the marketplace, mostly due to a successful recipe of mixing a clear vision, likeminded artistry, and a tight geographic radius, in a way that’s very similar to the success of labels like Sub Pop, Matador, and Mammoth Records in the early 90s.

The new normal is to be the big fish in a little pond and success continues to come for those labels with laser focus.

Bottom line is that there’s a lot of good music out there and most of it is not right for major labels anymore. There used to be a time when consumers bought releases from particular labels simply because the releases were so heavily and successfully curated that fans felt an allegiance and a belief that that label’s brand stood for quality. The best example of this was Def Jam in the early days. In the next several years look for indie labels to continue to pop up, grow their fanbase, and happily own their little piece of the world.

What does this mean for artists looking for a record deal?

Continue to think global but start by acting local. Take a look a the labels in your area that may be a good fit first and truly assess if you belong on a major label. Chances are you don’t in the new world.

The Future of Live Concerts

It’s no secret that most popular artists are making most of their bucks from concerts and brand partnerships. But what does the future of concerts look like and will this affect the artists as well as the fans?

Newsflash: we are already experiencing a shift in the way we see concerts. All of you are buying tickets to a show online — soon the hard ticket stub will be a thing of the past as you simply swipe your phone and go about your merry way. It’s not just concerts — we already use the same technology to get many other goods including movie tickets, airline flights, and many others.

That’s not news, you say! That’s just technology making the purchase easier.

You want to know what happens to that fan experience? You know, when you’re standing so close you can feel the artist sweat? If you are one of the lucky few to be that close, you probably waited all day and stood on your feet for hour after hour for that prized spot.

But many fans no longer want that live experience, especially in the cases of larger arena and stadium shows. I get it — by the time you buy the tickets, shlep to the venue, park your car, and buy your beer and t-shirt before finding your seats fighting the sea of other people doing the same thing all along the way, your wallet feels empty and the experience has lost its luster.

Festivals like Lollapalooza already stream live shows on YouTube. Image: Mashable.

Look for major growth in the streaming of concerts, especially for those aforementioned arena shows for two reasons: first, many fans would rather enjoy the show in the privacy and comfort of their own home and, next, because it gives artists another income stream.

Festivals like Coachella and Lollapalooza are already on board. Couple that with technology advances (holographic Tupac performances??) and you’ve got a movement. Look for YouTube and UStream to continue to lead the pack.

The live show is coming to you and you can decide just how you want to see it and wear your pajamas if you so desire.

What does this mean for the up-and-coming touring act or artist interested in touring?

Make technology your friend. Posting flyers to get the word out and making tickets available only at the venue hurts your chances of reaching maximum fan potential. Work with your venue to sell tickets online or experiment with streaming shows for a small fee either live or after the fact. Get creative with your YouTube channel and make live content a bigger part of your fan experience. It will build your buzz and bring more bodies to the venues and online events as your reputation builds a live band with surprises. Reverb Tip: Meanwhile, it doesn’t hurt to play live gigs while you get acquainted with live streaming. We recommend you try the free Gig Finder, which will connect you to the best venues in any town. 

The Future of Radio

Terrestrial radio is still the #1 way that people discover music, but that may be changing as we speak.

Local radio vs internet radio: which is better for indie artists?

The real question facing radio is: will it all become digital or will good ol’ AM/FM still have a presence? We know that if you aren’t driving, don’t have a car, or live in a major urban center like New York City, YouTube has become the destination for listening to music. Pandora and Spotify both have fairly robust internet radio presences, yet there are few things to consider as we look forward.

For those of you paying attention, have you been following the Internet Radio Fairness Act?  The IRFA wants to reduce the royalties being paid by internet music streaming services like Pandora.

On the other side, record labels and artists feel that the act will deprive rights holders of deserving income. The bill hasn’t been passed and my crystal ball tells me it won’t when nicknames for the bill include the “unfairness act” and the “paycheck reduction act.”

When the majority of the music community is against something, clearly there’s an issue, but it brings up many questions that will impact the future of radio.

Currently there are several ways that people use Internet radio services. From niche playlists to sites dedicated to discovering new artists.

Internet radio has the potential to break even bigger barriers than it has; yet copyright laws are hindering this evolution. Also keep in mind that in over 85 car models there is some form of Internet radio service integrated into the cars entertainment system. This issue needs to be figured out ASAP. Internet radio operates under a completely different rate than other forms of digital radio and everyone is taking notice.

Bottom line: There will always be radio, yet the way we access it will continue to change as wireless gets better and networks like 4G have more power.

Look for smarter recommendation-based software and more interactive and personalized experience — a theme that will repeat itself over and over in the growth of digital media and the technological advances that accompany it.

What does this mean for new artists looking to get exposure on the airwaves?

Don’t get your hopes up unless your music is ear candy for terrestrial radio and you’ve got a major label promoting your song. The sea of artists found on Spotify makes a breakthough difficult and new artists are rarely “discovered” via recommendation-based software platforms like Pandora. Look for local radio, specialty shows, college radio and a strong, creative Internet presence to get your music out. Reverb Tip: We recommend two great ways to get your music heard by more people: 1) Submit to opportunities — everything from festivals to online radio play; 2) Run a Promote It campaign on top music sites.

The Future of Licensing

Before you lament all of the changes or fear the demise of the traditional business, hold onto your hat because the future of licensing looks bright.

The opportunities for artists to get their songs placed on other outlets such as television, film, and video games are exponentially increasing. TV and film license fees have been decreasing and video games are allowing artists to make up for that loss. Video games are giving artists what’s known as performance-based royalties, which allow them to reach a new type of audience.

How does this impact the ever growing and evolving Internet?

Internet outlets are getting smarter! They’re creating exclusive content and licensing music for only online usage. Artists can now have their songs placed on everything from a Hulu original series to a series on Netflix. It used to be extremely difficult for new artists to get placements on TV/film. Now with all these new outlets, artists have many more opportunities to get heard and seen.

And when you speak about online content, you must bring YouTube into the conversation.

Will it remain an outlet for fly by night, flavor of the moment quasi-stars to reach critical acclaim, or is the future of TV at stake?  YouTube is undergoing a giant makeover within the next few years as premium content and niche channels are about to take over. YouTube has the potential to become the go-to platform for building business media in the future. They aim to develop channels that are topic specific and interactive — meaning viewers will get exactly what they want. The company has already invested 100 million dollars in developing premium channels that range from education to fashion.

This will also allow YouTube to form deeper integrations with the other companies and products like Google. Count on YouTube to remain on top and in control.

What does this mean for you?

Put down the guitar for a minute and get your fingers working on the computer to develop lists of outlets, shows, gaming properties and online networks to pitch music to. Unsigned, up-and-coming acts regularly get placements on networks programs these days and that trend is going to continue. Make music licensing a centerpiece of your story.

Welcome to the future!

Comments

  1. [...] first, take a moment to read this article on the FUTURE OF THE MUSIC BIZ.   It will give you a perspective on where this whole thing is [...]

  2. [...] (ANUARY 31, 2013). Music Industry Predictions: Labels, Concerts, Licensing and More. Available: http://blog.reverbnation.com/2013/01/31/music-industry-predictions-labels-concerts-licensing-and-mor…. Last accessed 1st may 2013. Share this:TwitterFacebookLike this:Like Loading… This entry was [...]

  3. [...] Rabhan, J. (2013, 01 31). Music Industry Predictions: Labels, Concerts, Licensing and More. Retrieved 10 06, 2013, from ReverbNation: http://blog.reverbnation.com/2013/01/31/music-industry-predictions-labels-concerts-licensing-and-mor… [...]

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